Takeaways
- The DOJ is expected to announce its approval of the Aetna/CVS deal, subject to Medicare Part D divestitures by the companies to WellCare.
- A formal announcement could happen this week.
- A decision had been expected “any day now,” said an antitrust consultant who is familiar with the transaction. The proposed divestitures to WellCare, along with the DOJ’s recent approval of Express Scripts/Cigna, support the timing guidance by CVS that the transaction will close in the early part of Q4.
- Approval is outstanding in several states, including California, Connecticut, Georgia, Iowa and New York.
The DOJ is nearly done with its review of Aetna/CVS, and an announcement of conditional approval could happen this week, according to an antitrust consultant and two former government attorneys who are familiar with the transaction.
Approval is expected to be conditioned on significant Medicare Part D divestitures to WellCare.
“We’ve been waiting for a decision any day now,” said the antitrust consultant. The companies recently reiterated their timing guidance that the deal would close in the early part of Q4, which implied they were expecting the DOJ’s conditional approval based on the divestiture package to WellCare, the consultant said.
According to the first former government attorney, an announcement this week would align with the companies’ disclosure of divestitures to WellCare. “The DOJ usually moves quicker than the FTC once a buyer is approved,” said this attorney, who now works in private practice on antitrust matters. “Two or three weeks would give the DOJ enough time to get the paperwork straight.”
The second former government attorney said the DOJ’s recent approval of the Express Scripts/Cigna deal is further indication the timing is right for conditional approval of Aetna/CVS. Moreover, DOJ antitrust head Makan Delrahim recently stated his support for deciding merger investigations within six months of a second request, this attorney noted.
The transaction still needs to be approved in roughly a dozen states, including California, Connecticut, Georgia, Iowa and New York. California and Connecticut both have already held public hearings.
Georgia will hold a public hearing on Oct. 17, Iowa plans to hold a public hearing on Oct. 24, and New York - which has raised
concerns about the deal - said state regulators will hold a hearing on Oct. 18.
In at least some states, such as Missouri, the DOJ’s conditional approval is likely to provide the basis for state sign-off.
--Ryan Lynch and Matt Tracy